2024 /2025 | © copyright | This work may not be copied for profit gain | Excel!
Massachusetts Property & Casualty Insurance
License Exam Questions and Correct Answers
| Latest Update
Insurance
✓ -:- Transfer of risk from a per son or business to an insurer
Risk
✓ -:- Uncertainty / Possibility of a loss
Exposure
✓ -:- Risks for which the insurance company would be liable
Peril
✓ -:- A cause of loss. House burns down, peril is the fire
Direct
✓ -:- Physical loss
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,2024 /2025 | © copyright | This work may not be copied for profit gain | Excel!
Indirect
✓ -:- consequence of the direct loss
Hazard
✓ -:- increases the chance of loss
Physical hazard
✓ -:- The hazard can be seen
Moral hazard
✓ -:- Dishonesty
Morale hazard
✓ -:- carelessness
2|P a g e | G r a d e A + | 2 0 2 0 2 5
,2024 /2025 | © copyright | This work may not be copied for profit gain | Excel!
STARR!
✓ -:- Method of handling risk.
S - Sharing
T - Transfer
A - Avoidance
R - Retention
R - Reduction
Contract (policy)
✓ -:- An agreement between the insured and the insurer
1st party
✓ -:- Insured (customer)
2nd party
3|P a g e | G r a d e A + | 2 0 2 0 2 5
, 2024 /2025 | © copyright | This work may not be copied for profit gain | Excel!
✓ -:- Insurer (insurance company)
Law of large numbers
✓ -:- The larger the group, the more accurately future losses can be
predicted
CANHAM
✓ -:- Elements of an insurable risk
C - Calculable
A - Affordable
N - Non-catasrophic
H - Homogenous
A - Accidental
M - Measurable
Adverse selection
4|P a g e | G r a d e A + | 2 0 2 0 2 5
Massachusetts Property & Casualty Insurance
License Exam Questions and Correct Answers
| Latest Update
Insurance
✓ -:- Transfer of risk from a per son or business to an insurer
Risk
✓ -:- Uncertainty / Possibility of a loss
Exposure
✓ -:- Risks for which the insurance company would be liable
Peril
✓ -:- A cause of loss. House burns down, peril is the fire
Direct
✓ -:- Physical loss
1|P a g e | G r a d e A + | 2 0 2 0 2 5
,2024 /2025 | © copyright | This work may not be copied for profit gain | Excel!
Indirect
✓ -:- consequence of the direct loss
Hazard
✓ -:- increases the chance of loss
Physical hazard
✓ -:- The hazard can be seen
Moral hazard
✓ -:- Dishonesty
Morale hazard
✓ -:- carelessness
2|P a g e | G r a d e A + | 2 0 2 0 2 5
,2024 /2025 | © copyright | This work may not be copied for profit gain | Excel!
STARR!
✓ -:- Method of handling risk.
S - Sharing
T - Transfer
A - Avoidance
R - Retention
R - Reduction
Contract (policy)
✓ -:- An agreement between the insured and the insurer
1st party
✓ -:- Insured (customer)
2nd party
3|P a g e | G r a d e A + | 2 0 2 0 2 5
, 2024 /2025 | © copyright | This work may not be copied for profit gain | Excel!
✓ -:- Insurer (insurance company)
Law of large numbers
✓ -:- The larger the group, the more accurately future losses can be
predicted
CANHAM
✓ -:- Elements of an insurable risk
C - Calculable
A - Affordable
N - Non-catasrophic
H - Homogenous
A - Accidental
M - Measurable
Adverse selection
4|P a g e | G r a d e A + | 2 0 2 0 2 5
